One of the challenges of any not-for-profit foundation is achieving meaningful scale. Most models for non-profit activity do not anticipate or allow the organization to scale. That may be why we have over 1.5 million non-profit tax filers in the U.S., or 1 for every 4 tax paying corporations.
The problem for the non-profit with no scale is three fold:
- The organization makes a very small or localized social contribution
- Overhead and administration takes up a significant part of financial resources
- The organization is challenged to build a full-time, professional management team
In the case of corporate foundations the solution may be to outsource the management of their foundation. Here is how it might work. The corporation finds a large, international foundation with a similar focus-health, education, hunger, conservation, etc. The corporation commits their social responsibility budget for several years exclusively to the foundation(s) with the same purpose. The foundation provides quarterly reporting to document that the funding was used in accordance with the original understanding. The foundation agrees to include the corporation in all of its publicity and marketing materials.
This idea is really not so different from Warren Buffett entrusting his fortune to the Gates Foundation. Anyone interested to outsource the management of their educational foundation should contact me.
